Application of Net Present Value as an Alternative to Accounting Measurement on Predicting the Probability of Bank Loans DefaultA Case Study

Abstract

his research aims to apply net present value as an alternative to accounting measurement on predicting the probability of bank loans default, to achieve this aim, the researcher the researcher carried out a practical application on a medium-term loan contract presented by a Syrian private commercial bank to a Syrian private industrial company in the textile industry in Aleppo, and this contract is a loan contract to purchase a machinein installments against equal monthly payments.The following results were reached:1-The net present value alternative is the most consistent alternative with the study of companies' ability to pay their future obligations, especially bank loans.2-There is an effect of applying an alternative net present value to measure future cash flows on predicting the probability of default in repaying bank loans granted to companies.